Abstract:
The broiler industry is considered an essential sub-sector of the agricultural industry for the
stimulation of economic growth in South Africa. This subsector consists of a vibrant largescale
component, and together with other participants, dominates the peripheral markets.
However, smallholder broiler producers find it difficult to participate in formal markets. This
is due to numerous constraints and barriers which impede entry of these resource-poor
farmers. In addition, there is a general reluctance of buyers in formal markets to engage with
the numerous smallholder farmers.
The overall purposes of this study were to investigate the extent of smallholder farmer
market access and establish reasons for the limited formal market access of smallholder
farmers in the broiler industry in Gauteng Province. The study examined the broiler subsector
in the province by using a holistic approach. It was, therefore, not restricted to
smallholder farmers but also included other participants, such as retail supermarkets,
various poultry associations, and government, all of which play a crucial role in broiler
production and marketing.
The specific objectives of this study were to:
1. Determine the size of the smallholder broiler sub-sector in Gauteng, with
reference to the number of farmers involved and the quantities of broilers
supplied;
2. Assess the economic viability of the smallholder broiler enterprise;
3. Determine the level of market participation of smallholder broiler farmers, with
particular reference to the quantity of broilers sold in formal markets; 4. Identify farmer-related determinants of market participation - this included
farming experience, level of education, economic status, and the gender of
participants; and
5. Identify external determinants of smallholder broiler market participation, such as
barriers to entry, actual market requirements, transaction costs and infrastructure
required to start a broiler enterprise approved for formal markets.
The results of the study indicated that smallholder broiler farmers in Gauteng dominated
informal markets. These farmers lacked the land and financial capital essential for starting
the extensive operations required to subcontract to the vertically integrated operators.
Furthermore, access to information on business management and expansion, and broiler
project management were restricted. The stringent sanitary requirements for broiler supply
by supermarkets further prevented participation by smallholder farmers in these retail
outlets. As such, smallholder farmers were inclined to congregate together and competed
only in informal markets.
It was recommended that the South African government should consider participating in a
public private partnership (PPP) with established businesses in the broiler sub-sector to
support the development of smallholder farmers. This could take the form of “soft loans” to
enable the smallholder broiler farmers to have the capital and infrastructural requirements to
be contract producers to the established broiler operators. To ensure success of this
business enterprise, it is essential that there is thorough screening of prospective
candidates. Additionally, support should ensure that smallholder farmers have increased
access to training in business management, broiler management and business expansion.
In addition to promoting formal market participation by smallholder broiler producers,
government should also support the informal broiler market to ensure both its expansion and
improved standards of service for the customers. This is a growing market with a loyal
customer base for both live birds and fresh broiler meat. With more awareness and
marketing, the turnover of this market could increase substantially in the future.
